Filed Pursuant to Rule 424(b)(3)
Registration Statement No. 333-112367
PRICING SUPPLEMENT TO THE PROSPECTUS SUPPLEMENT NO. 371
DATED FEBRUARY 6, 2004 -- NO. 419
(GOLDMAN SACHS LOGO)
THE GOLDMAN SACHS GROUP, INC.
Medium-Term Notes, Series B
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$8,355,559.50
11.5% Mandatory Exchangeable Notes due February 2005
(Exchangeable for Common Stock of Seagate Technology)
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This pricing supplement and the accompanying prospectus supplement no.
371, relating to the mandatory exchangeable notes, should be read together.
Because the mandatory exchangeable notes are part of a series of our debt
securities called Medium-Term Notes, Series B, this pricing supplement and the
accompanying prospectus supplement no. 371 should also be read with the
accompanying prospectus dated February 6, 2004, as supplemented by the
accompanying prospectus supplement dated February 6, 2004. Terms used here have
the meanings given them in the accompanying prospectus supplement no. 371,
unless the context requires otherwise.
The mandatory exchangeable notes offered by this pricing supplement,
which we call the "offered notes" or the "notes", have the terms described in
the accompanying prospectus supplement no. 371, as supplemented or modified by
the following:
ISSUER: The Goldman Sachs Group, Inc.
FACE AMOUNT: each offered note will have a face amount equal to $10.755, which
is the initial index stock price; the aggregate face amount for all the offered
notes is $8,355,559.50
INITIAL INDEX STOCK PRICE: $10.755
ORIGINAL ISSUE PRICE: 100% of the face amount
NET PROCEEDS TO THE ISSUER: 99.95% of the face amount
TRADE DATE: August 10, 2004
SETTLEMENT DATE (ORIGINAL ISSUE DATE): August 17, 2004
STATED MATURITY DATE: February 17, 2005, unless extended for up to six business
days
INTEREST RATE (COUPON): 11.5% per year
INTEREST PAYMENT DATES: September 17, October 17, November 17, December 17,
January 17 and February 17 in each year, beginning September 17, 2004
REGULAR RECORD DATES: for the interest payment dates specified above September
10, October 11, November 10, December 10, January 10 and February 10
INDEX STOCK AND INDEX STOCK ISSUER: common stock of Seagate Technology
CUSIP NO.: 38143U267
Your investment in the notes involves certain risks. In particular,
assuming no changes in market conditions or any other relevant factors, the
value of your note on the date of this pricing supplement (as determined by
reference to pricing models used by Goldman, Sachs & Co.) is significantly less
than the original issue price. We encourage you to read "Additional Risk Factors
Specific to Your Note" beginning on page S-2 of this pricing supplement and on
page S-3 of the accompanying prospectus supplement no. 371 so that you may
better understand those risks. The offered notes are not principal-protected and
the payment amount is capped.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PRICING SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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Goldman Sachs may use this pricing supplement in the initial sale of
the offered notes. In addition, Goldman, Sachs & Co. or any other affiliate of
Goldman Sachs may use this pricing supplement in a market-making transaction in
an offered note after its initial sale. UNLESS GOLDMAN SACHS OR ITS AGENT
INFORMS THE PURCHASER OTHERWISE IN THE CONFIRMATION OF SALE, THIS PRICING
SUPPLEMENT IS BEING USED IN A MARKET-MAKING TRANSACTION.
GOLDMAN, SACHS & CO.
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PRICING SUPPLEMENT DATED AUGUST 10, 2004.
PRINCIPAL AMOUNT: On the stated maturity date, each offered note will
be exchanged for index stock at the exchange rate or,
at the option of Goldman Sachs, for the cash value of
that stock based on the final index stock price.
EXCHANGE RATE: If the final index stock price equals or exceeds the
threshold appreciation price, then the exchange rate
will equal the threshold fraction times one share of
index stock for each $10.755 of the outstanding face
amount. Otherwise, the exchange rate will equal one
share of the index stock for each $10.755 of the
outstanding face amount. The exchange rate is subject
to anti-dilution adjustment as described in the
accompanying prospectus supplement no. 371.
Please note that the amount you receive for each
$10.755 of outstanding face amount on the stated
maturity date will not exceed the threshold
appreciation price and that it could be substantially
less than $10.755. You could lose your entire
investment in the offered notes.
INITIAL INDEX STOCK PRICE: $10.755 per share.
FINAL INDEX STOCK PRICE: The closing price of one share of the index stock on
the determination date, subject to anti-dilution
adjustment.
THRESHOLD APPRECIATION The initial index stock price times 1.20, which
PRICE: equals $12.906 per share.
THRESHOLD FRACTION: The threshold appreciation price divided by the final
index stock price.
DETERMINATION DATE: The fifth business day prior to February 17, 2005
unless extended for up to five business days.
NO LISTING: The offered notes will not be listed on any
securities exchange or interdealer market quotation
system.
ADDITIONAL RISK FACTORS ASSUMING NO CHANGES IN MARKET CONDITIONS OR ANY OTHER
SPECIFIC TO YOUR NOTE: RELEVANT FACTORS, THE VALUE OF YOUR NOTE ON THE DATE
OF THIS PRICING SUPPLEMENT (AS DETERMINED BY
REFERENCE TO PRICING MODELS USED BY GOLDMAN, SACHS &
CO.) IS SIGNIFICANTLY LESS THAN THE ORIGINAL ISSUE
PRICE
The value or quoted price of your note at any time
will reflect many factors and cannot be predicted. If
Goldman, Sachs & Co. makes a market in the offered
notes, the price quoted by Goldman, Sachs & Co. would
reflect any changes in market conditions and other
relevant factors, and the quoted price could be
higher or lower than the original issue price, and
may be higher or lower than the value of your note as
determined by reference to pricing models used by
Goldman, Sachs & Co.
If at any time a third party dealer quotes a price to
purchase
S-2
your note or otherwise values your note, that price
may be significantly different (higher or lower) than
any price quoted by Goldman, Sachs & Co. You should
read "Additional Risk Factors Specific to Your
Note -- The Market Price of Your Note May Be
Influenced by Many Unpredictable Factors" in the
accompanying prospectus supplement no. 371.
Furthermore, if you sell your note, you will likely
be charged a commission for secondary market
transactions, or the price will likely reflect a
dealer discount.
There is no assurance that Goldman, Sachs & Co. or
any other party will be willing to purchase your
note; and, in this regard, Goldman, Sachs & Co. is
not obligated to make a market in the notes. See
"Additional Risk Factors Specific to Your Note --
Your Note May Not Have an Active Trading Market" in
the accompanying prospectus supplement no. 371.
SEAGATE TECHNOLOGY According to its publicly available documents,
Seagate Technology designs, manufactures and markets
rigid disc drives. Information filed with the SEC by
Seagate Technology under the Exchange Act can be
located by referencing its SEC file number:
001-31560.
HISTORICAL TRADING PRICE The index stock is traded on the New York Stock
INFORMATION: Exchange under the symbol "STX". The following table
shows the quarterly high and low trading prices and
the quarterly closing prices for the index stock on
the New York Stock Exchange for the fourth quarter in
2002, the four calendar quarters in 2003 and the
three calendar quarters in 2004, through August 10,
2004. We obtained the trading price information shown
below from Bloomberg Financial Services, without
independent verification.
HIGH LOW CLOSE
----- ---- -----
2002
Quarter ended December 31........ 11.78 9.86 10.73
2003
Quarter ended March 31........... 12.95 7.78 10.32
Quarter ended June 30............ 18.49 10.15 17.65
Quarter ended September 30....... 27.9 17.45 27.2
Quarter ended December 31........ 31.31 16.7 18.9
2004
Quarter ended March 31........... 21.51 15.3 16.13
Quarter ended June 30............ 16.24 11.73 14.43
Quarter ending September 30
(through August 10, 2004) ..... 14.3 10.53 10.94
Closing Price on August 10, 2004. 10.94
S-3
As indicated above, the market price of the index
stock has been highly volatile during recent periods.
It is impossible to predict whether the price of the
index stock will rise or fall, and you should not
view the historical prices of the index stock as an
indication of future performance. See "Additional
Risk Factors Specific to Your Note -- The Market
Price of Your Note May Be Influenced by Many
Unpredictable Factors" in the accompanying prospectus
supplement no. 371.
HYPOTHETICAL PAYMENT The table below shows the hypothetical payment
AMOUNT: amounts that we would deliver on the stated maturity
date in exchange for each $10.755 of the outstanding
face amount of your note, if the final index stock
price were any of the hypothetical prices shown in
the left column. For this purpose, we have assumed
that there will be no anti-dilution adjustments to
the exchange rate and no market disruption events.
The prices in the left column represent hypothetical
closing prices for one share of index stock on the
determination date and are expressed as percentages
of the initial index stock price, which equals
$10.755 per share. The amounts in the right column
represent the hypothetical cash value of the index
stock to be exchanged, based on the corresponding
hypothetical final index stock prices, and are
expressed as percentages of the initial index stock
price. Thus, a hypothetical payment amount of 100%
means that the cash value of the index stock that we
would deliver in exchange for each $10.755 of the
outstanding face amount of your note on the stated
maturity date would equal 100% of the initial index
stock price, or $10.755, based on the corresponding
hypothetical final index stock price and the
assumptions noted above.
HYPOTHETICAL FINAL INDEX HYPOTHETICAL PAYMENT
STOCK PRICE AS % OF AMOUNTS AS % OF
INITIAL INDEX STOCK PRICE $10.755 FACE AMOUNT
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175% 120%
150% 120%
125% 120%
120% 120%
100% 100%
75% 75%
50% 50%
0% 0%
S-4
The payment amounts shown above are entirely
hypothetical; they are based on market prices for the
index stock that may not be achieved on the
determination date and on assumptions that may prove
to be erroneous. The actual market value of your note
on the stated maturity date or at any other time,
including any time you may wish to sell your note,
may bear little relation to the hypothetical payment
amounts shown above, and those amounts should not be
viewed as an indication of the financial return on an
investment in the offered notes or on an investment
in the index stock. Please read "Additional Risk
Factors Specific to Your Note" and "Hypothetical
Payment Amounts on Your Note" in the accompanying
prospectus supplement no. 371.
Payments on your note are economically equivalent to
the amounts that would be paid on a combination of
other instruments. For example, payments on your note
are economically equivalent to the amounts that would
be paid on a combination of an interest-bearing bond
bought, and an option sold, by the holder (with an
implicit option premium paid over time to the
holder). The discussion in this paragraph does not
modify or affect the terms of the offered notes or
the United States income tax treatment of the offered
notes as described under "Supplemental Discussion of
Federal Income Tax Consequences" in the accompanying
prospectus supplement no. 371.
HEDGING: In anticipation of the sale of the offered notes, we
and/or our affiliates have entered into hedging
transactions involving purchases of the index stock
on the trade date. For a description of how our
hedging and other trading activities may affect the
value of your note, see "Additional Risk Factors
Specific to Your Note -- Our Business Activities May
Create Conflicts of Interest Between You and Us" and
"Use of Proceeds and Hedging" in the accompanying
prospectus supplement no. 371.
S-5